Organizational Change and Development 15 C H A P T E R F I F T E E N Organizational Change and Development

Why do organizations change? Unplanned Change Managers don’t expect it Can lead to chaotic, uncontrolled periods of change Planned Change Systematic efforts by managers to move organizations to a new state Design, technology, tasks, people, information systems, etc.

External Forces for Change Computer technology law of telecosm effect on knowledge, competition, employment relations Globalization and local competition effect on restructuring, outsourcing mergers Demography diversity emerging expectations © Corel Corp. With permission.

Internal Forces For Change Turnover of leaders Need for profits _______________ _________________ ________________

Types of Planned Change Evolutionary Change Incremental adaptation to the external environment Series of phases Need for change Unfreeze Change (or move) Refreeze

Types of Change (cont) Revolutionary Change Unfolds over long periods of time Equilibrium periods: organization moves steadily toward its mission and goals Revolutionary periods: Feverish change that affects the overall strategy of the firm Deep structures are affected like culture, design, processes, and relationships with the environment

Resistance to change People and Organizations resist changes from both internal and external sources and planned and unplanned change Manager’s reaction See resistance as a problem Treat it coercively Added resistance See resistance as a signal People need more information, or better treatment Gather insights from people

Slide 18.6 Sources of Resistance to Change Individual Resistance * Perception * Personality * Habit * Threats to power and influence * Fear of the unknown * Economic reasons Organizational Resistance * Organization design * Organizational culture * Resource limitations * Fixed investments * Interorganizational agreements Resistance to Change

Slide 18.5 Employee Readiness for Change Perceived Personal Risk from Change Low High High High readiness for change Moderate to indeterminant readiness for change Level of Dissatisfaction with the Current Situation Moderate to indeterminant readiness for change Low readiness for change Low Source: Adapted from Zeira, Y., and Avedisian, J. Organizational planned change: Assessing the chances for success. Organizational Dynamics, Spring 1989, 37.

Resistance to Change Direct Costs Saving Face Fear of the Unknown Breaking Routines Incongruent Systems Incongruent Team Dynamics Forces for Change

Slide 18.4 A Systems Model of Change People Culture Task Technology Design Strategy

Slide 18.7 Force Field Analysis Driving forces Resisting forces High performance goals Group norms for output New equipment Familiarity with present equipment Complacency Competition Employees with new skills Need to learn new skills Desire for increased influence and rewards Fear of reduced influence and rewards Current level of group performance Desired level of group performance Source: Adapted from Zand, D.E. Force field analysis. In N. Nicholson (ed.), Blackwell Encyclopedic Dictionary of Organizational Behavior. Oxford, England: Blackwell, 1995, 181.

Slide 18.3 Initiatives Contributing to Effective Change Management Motivating Change Creating a Vision Effective Change Management Developing Political Support Managing the Transition Sustaining Momentum Source: Adapted with permission from Cummings, J.G., and Worley, C.G. Organization Development and Change, 6th ed. Cincinnati: South-Western, 1997, 154.

Successfully Diffusing Change Successful pilot study Favorable publicity Top management support Labor union involvement Diffusion strategy described well Pilot program people moved Courtesy of Roberts Express

Customer-Driven Change at Continental Airlines Continental Airlines executives created an urgency to change by listening to customers and communicating their concerns to employees. Customer-driven change motivates employees to engage in continuous change. Courtesy of Continental Airlines

Minimizing Resistance to Change Communication Minimizing Resistance to Change Coercion Training Negotiation Employee Involvement Stress Management

Refreezing the Desired Conditions Creating organizational systems and team dynamics to reinforce desired changes alter rewards to reinforce new behaviors new information systems guide new behaviors recalibrate and introduce feedback systems to focus on new priorities

Organization Development A planned system wide effort, managed from the top with the assistance of a change agent, that uses behavioral science knowledge to improve organizational effectiveness.

Action Research Process Establish Client- Consultant Relations Diagnose Need for Change Introduce Change Evaluate/ Stabilize change Disengage Consultant’s Services

Appreciative Inquiry Process Discovery Discovering the best of “what is” Dreaming Forming ideas about “what might be” Designing Engaging in dialogue about “what should be” Delivering Developing objectives about “what will be”

Parallel Structures Parallel Structure Organization

Organization Development Concerns Cross-Cultural Concerns Linear and open conflict assumptions different from values in some cultures Ethical Concerns Management power Employee privacy rights Employee self-esteem Consultant’s role